Apple’s Beats deal is for Dre, streaming, and everything else

Nate Swanner - May 22, 2014, 5:02pm CDT
Apple’s Beats deal is for Dre, streaming, and everything else

An attempt to save the music industry? An acquihire to get Dr.Dre? Two reports suggest Apple’s deal for Beats would encompass both goals. One one hand, Beats would be the iTunes streaming service many have wanted, while Dr. Dre and Beats partner Jimmy Iovine round out Apple’s “board of cool”.

First, we’ll tackle the concept that Apple wants Beats because of Dre and Iovine. According to a source speaking to TechCrunch, the deal hinges on those two joining others like Ben Shaffer of Nike and Ari Partinen of Leica in Apple’s management structure. It’s expected they’ll round out some sort of cultural renaissance at Apple, guiding us into a world of cool new stuff.

The second bit of news circles around Apple’s streaming music ambitions. According to a source — again speaking to TechCrunch — Apple wants to take Beats under its wing, but operate it as a standalone streaming service. It won’t be swallowed up into iTunes, because Apple is “deeply conscious” they still generate a lot of revenue for the music industry via album sales on iTunes. That same source also says Apple has been “deeply considering” streaming music for two years.

Apple is also said to be trying to work out a deal to offer streaming music via Beats for $5/month, but not touch their iTunes structure (which has slumpng sales, by the way). They’d sweeten the deal by giving labels a higher cut of the revenue, but it doesn’t sound like they’d offer up more to artists — a sad Beats holdover. It’s basically a way for both Apple and the music industry to recoup lost revenue from iTunes — revenue lost to streaming music. Apple would simply have its hand in both cookie jars.

Apple wants to have it all ways with music, it seems. They want to hire away the cultural faces of Beats for their own needs, offer up an existing streaming service, but still sell albums via iTunes. Of course, at least one of the sources claims their confidence level in the deal is about 70%. That’s maybe the most concerning thing about all of this. Remember when this deal was “closing” weeks ago?

Source: TechCrunch (1), (2)

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